A U.S. flag is draped amidst rubble left by a fire during Superstorm Sandy, Tuesday, Nov. 20, 2012, at Breezy Point in the Queens borough of New York. / AP Photo/Frank Franklin II

Written by

Joseph Spector,

Albany Bureau Chief

ALBANY — Higher unemployment and lower tax collections have state leaders warning of a growing state budget deficit following Superstorm Sandy.

Comptroller Thomas DiNapoli said Wednesday that state's tax collections have fallen $170.8 million below July estimates and $259.8 million below initial estimates last spring. In order for the state to keep its books balanced, tax collections would have to grow 5.1 percent in the last five months of the fiscal year, which ends March 31.

His projections through October included little from Superstorm Sandy, which hit Oct. 29 and is expected to drop the state's receipts and lead to higher expenses.

“Tax collections were lower than expected through October,” DiNapoli said in a statement. “Tax revenue estimates should be revised downward. Adjustments should also factor in the additional costs from Hurricane Sandy. As recovery efforts continue, realistic projections are critically important for the state to effectively manage its available resources.”

Gov. Andrew Cuomo on Tuesday said unemployment in New York City and its suburbs grew by nearly 50,000 claims since the storm, up about 30 percent. He said the additional people out of work or who lost work temporarily because of the storm would impact the state’s tax revenue.

“It is too early to calculate the exact impact on the budget. Nobody really knows yet. But it can’t be good,” Cuomo said on 1300-AM (WGDJ) in Albany.

The state has gotten federal approval to offer unemployment benefits to those who lost their jobs or were temporarily out of work because of the storm.

The state is weeks late in releasing its mid-year financial plan. The state has kept its books balanced through the fiscal year, which ends March 31. But it’s grappling with a $1 billion budget gap for the 2013-14 fiscal year, and Cuomo suggested on Nov. 8 that the estimated $33 billion cost to New York for the storm could double the budget gap.

Cuomo will release his 2013-14 budget proposal in mid-January. Budget gaps in recent years have been among the highest in history: In 2009, the state had a deficit of $17 billion, and in Cuomo’s first year last year he dealt with a $10 billion deficit.

The state's first quarter update in July projected tax growth of 3.1 percent for the year, but the tax collections of $35.9 billion through October rose just 1.5 percent, or $535 million, from the same period last year, DiNapoli said.